Yes, euros. Not dollars. That's the preferred method of payment in Tehran. In just the latest sign of geopolitical tensions, Iran's asking customers to pay for its most valuable export in euros.

And some of them have already started. One Chinese state-run company in particular. And Japan, which buys 25 percent of Iran's production, said it's ready to switch, too.

We asked Marketplace's Jeff Tyler to sort out what it might mean if traders start pulling out the euros to pay for crude. Hi, Jeff.

JEFF TYLER: Hey, how's it going.

RYSSDAL: Help us understand this for a second. What difference really does it make if oil is denominated in euros rather than dollars, as it has been forever?

TYLER: Well, short term, probably nothing. Even if all Iran's trade partners paid exclusively in euros, economists tell me that it would have relatively little impact on the value of the dollar. In fact, in the last year or so, Russia has shifted away from using dollars and now prefers to get paid in euros, and that's had very little impact on the dollar. Economists say it doesn't matter what currency you use to pay for things, what matters is the currency that you don't exchange, but hold as a security.

RYSSDAL: All right, well leave it to the economists to make it difficult to understand. What does that mean when they start talking about foreign currency reserves and people holding onto the dollar like that?

TYLER: Well traditionally, the dollar has been seen as a safe currency. It's stable, it's where you go in times of trouble, and that's been good for the U.S. economy. Gives us more control over the global economy. It boosts our government coffers because we can mint money for much less than it costs to sell it to other countries. And in times of crisis, other folks come here. And that helps boost our economy.

RYSSDAL: All right, but Jeff — if I look at my little Reuters terminal here, it's gonna tell me that the dollar's been having a really tough time against the Japanese yen in the past couple of months and a really tough time against the euro as well.

TYLER: Well, there are some dark clouds out there. The trade deficit, the housing slump, the weakening economy. There are lots of reasons to think that the dollar is gonna look less attractive in the years to come.

RYSSDAL: OK, so let's flip this on its head and assume — for, you know, Secretary Paulson's sake — the worst case, that is to say, people stop using the dollar to pay for oil and they start using euros. What's that gonna mean for the dollar and then for the larger economy?

TYLER: Well, it could potentially be a good thing. If the world shifted over, hypothetically, to using euros, that would lower the value of the dollar, increasing our exports. Which would help us get our trade deficit in line.

RYSSDAL: China, of course, is the country that has the biggest trade surplus with us. They have a huge surplus, we have a deficit. They also have trillions of dollars sitting in their central bank. How's this gonna factor into that equation?

TYLER: Well, the biggest fear is that the dollar will become unattractive the Chinese, who will dump it. But that is very unlikely to happen, because they'd be shooting themselves in the foot. They own basically most of our debts. So if they were to undermine the value of that, they would be undermining the value of their own reserves.

RYSSDAL: All right. Marketplace's Jeff Tyler and the vagaries of the oil market and the dollar as the global currency. Thank you, Jeff.